Tag: Environmental Law

U.S. Court of Appeals for the Fourth Circuit’s Decision to Vacate Mountain Valley Pipeline Nationwide Permit

On November 27, 2018, the U.S. Court of Appeals for the Fourth Circuit issued the most recent in a series of decisions from various courts affecting the federal permitting and construction of interstate pipelines. Sierra Club v. U.S. Army Corps of Engineers, No. 18-1173 (4th Cir. Nov. 27, 2018). In this instance, the Circuit held that the U.S. Army Corps of Engineers violated the Clean Water Act when it verified that construction of the Mountain Valley Pipeline project could proceed pursuant to Nationwide Permit 12 in the State of West Virginia.[1] This decision will have an impact on the flexibility of federal and state agencies when it comes to permitting projects under the Clean Water Act Nationwide Permit program.

The Mountain Valley Pipeline project is a 304-mile natural gas pipeline proposed to run through West Virginia and Virginia. Earlier this year, the Corps had reinstated its verification that the project met the requirements of Nationwide Permit 12 – a general permit that provides authorization for certain discharges associated with the construction of linear energy infrastructure. The Circuit vacated the Corps’ verification in its entirety, leaving the project with no authorization under the Clean Water Act.

Unlike many decisions where the issue is the Corps’ own process in promulgating the Nationwide Permit in the first instance or the Corps’ assessment of whether a specific project falls within the federal parameters of the Nationwide Permit, this matter turned on whether the Corps properly incorporated the State’s conditions into its verification and whether the State itself followed the required Clean Water Act process.

In order to use a Nationwide Permit promulgated by the Corps, a project proponent must provide the Federal permitting agency a Section 401 water quality certification from the State (or other permitting agency with jurisdiction over the water) in which the regulated discharge originates, unless the Federal permitting agency determines that the certification requirement has been waived. The State certification and its conditions then become part of the federal Nationwide Permit. With respect to Nationwide Permit 12, the State of West Virginia had issued a general certification that imposed, after public notice and comment, certain special conditions on projects seeking authorization under Nationwide Permit 12 beyond what the Corps required. Two of these special conditions were at issue in this case:

  • Special Condition A, which requires an individual state water quality certification for certain projects including those involving construction of pipelines equal to or greater than 36 inches in diameter or if crossing waters regulated under Section 10 of the Rivers and Harbors Act; and

  • Special Condition C, which requires that individual stream crossings be completed in a continuous manner within 72 hours in certain conditions.

Pursuant to these Special Conditions, in order to seek authorization under Nationwide Permit 12, Mountain Valley Pipeline was expected to obtain an individual water quality certification and to complete stream crossings within 72 hours. However, West Virginia purported to “waive” its requirement that the pipeline obtain an individual water quality certification following a series of challenges to West Virginia’s individual water quality certification, and the Corps replaced Special Condition C with an alternate condition that the Corps found to be more protective of water quality with the apparent concurrence of the State.

The Fourth Circuit held: (1) the Corps’ verification violated Section 401 of the Clean Water Act because Section 401 unambiguously requires the Corps to incorporate the State’s certification with its special conditions in the federal verification without modification; and (2) Section 401 does not allow a state to waive its special conditions without public notice and comment, meaning that the project proponent remained subject to the condition requiring that it apply for an individual state water quality certification and, therefore, the Corps’ own verification was invalid.

In reaching these conclusions, the Circuit noted that “the Corps’ interpretation would radically empower it to unilaterally set aside state certification conditions as well as undermine the system of cooperative federalism upon which the Clean Water Act is premised.” Sierra Club, No. 18-1173 at *22. With respect to the State’s action purporting to waive its special condition, the Circuit explained that “[a]llowing West Virginia to revoke, on a case-specific basis, conditions imposed in its certification of a nationwide permit would impermissibly allow the state to circumvent [the CWA’s] explicit requirement that state permit certifications satisfy notice requirements.” Id. at *31.

Assuming this decision stands, the upshot is that both the Corps and the States (at least within the Fourth Circuit) will have less flexibility in how projects are permitted when a State has issued a general water quality certification with specific conditions. The Corps will need to require that the terms of such certifications are strictly followed in order to make decisions that comply with the Clean Water Act.

[1] The Circuit’s November 27, 2018 decision supports and expands upon the Circuit’s October 2, 2018 decision to vacate the Corps’ verification on more limited grounds.  Sierra Club v. U.S. Army Corps of Engineers, No. 18-1173 (4th Cir. Oct. 2, 2018).

© 2018 Bracewell LLP
This post was written by Ann D. Navaro and Christine G. Wyman of Bracewell LLP.

Ohio v. Sierra Club: The Integrity of the Clean Air Act

EPAYesterday, the Supreme Court of the United States announced it will not grant Certiorari in Ohio v. Sierra Club, et al. In this case, the Sixth Circuit found an area must adopt required pollution-control measures before the EPA can designate it as having satisfied the law’s health-based pollution standards.

In 1997, the EPA created the National Ambient Air Quality Standards of fine particulate matter in the air.  When the EPA created these standards, regions were designated as having met, or not met the air quality standards.  In order to meet the standards, states were required to adopt “reasonable measures and technologies” to reduce the pollution in the problematic areas.  In 2011, the EPA deemed Ohio to have met the appropriate standards because the air quality had improved. Ohio, however, had never created a pollution regulatory plan as the Clean Air Act required. In response, the Sierra Club filed suit alleging the EPA acted illegally by designated the areas as having met air quality standards.

Creating a pollution regulatory plan is crucial, according to Sanjay Narayan, the managing attorney for the Sierra Club on the case.  Before 1990, the Clean Air Act had no requirement that states produce an implementation plan.  According to Narayan, the expectation was “we [the EPA] don’t care how you get there, we aren’t going to tell you how to get there, we’re just going to check in at the deadline and expect you to have made it. And what happened was that the vast majority of the states did not meet the deadline.”

Narayan describes the implementation plan as “a show your math” requirement. This has been very useful in helping states create lasting change in their air quality–by creating a regulatory framework that shows how they can reduce air pollution, the states are more likely to meet their deadline.  Narayan points out “It’s also useful for other areas to know what worked and what successful areas did.  Here’s what turned out to be cost effective, that kind of record is tremendously useful as we move forward on what was meant to be a nation-wide campaign for healthy air for the public.”

In  Ohio v. Sierra Club, there are a few details to consider.  Pollution decreased, and that’s the goal.  However, it might not be that simple.  In the years preceding Ohio’s drop in air pollution, the economy crashed.  Narayan draws comparisons to the Beijing Olympics, saying, “When people aren’t running their [industrial] plants for economic reasons, the air cleans up a little bit.  But it turns around quickly once you turn the plants back on.”  However, Ohio did meet the standard, and according to Narayan, to comply with the Clean Air Act they’d simply need to go back and show their work.  He says, “They did meet the standard, and they say they have all the controls they need in place.  There is a procedural step that Ohio hasn’t taken, and it shouldn’t be hard for Ohio to take it.”

The Sixth Circuit decision that currently stands requires Ohio to take those regulatory steps. In the current case, the Sixth Circuit agreed that the entire portion of the Clean Air Act must be followed, and that it wasn’t enough for Ohio to have simply met the standards.  Ohio has appealed to the Supreme Court.

Narayan says, “It’s about the integrity of the clean air act.”  These requirements are crucial in ensuring the air gets cleaned up in a timely manner.  Narayan says, Decades of experience has shown us that without these requirements, states miss deadlines, air pollution lasts for much longer than it should and the public really suffers.  The pollution sends kids to the hospital with asthma, it creates respiratory disease in the elderly-delay is a disaster for public health.”

Article By Eilene Spear & Nicole Cudiamat Minnis of The National Law Review / The National Law Forum LLC
Copyright ©2016 National Law Forum, LLC

U.S. Court of Appeals Issues Split WOTUS Ruling

On February 22, a three-judge panel of the U.S. Court of Appeals for the Sixth Circuit (Cincinnati) issued a split 2-1 decision, ruling that it has jurisdiction to proceed with challenges to the Obama administration’s “Waters of the United States” rule, or WOTUS, as opposed to federal district courts. A wide range of government, industry and agriculture interests have filed lawsuits in several district courts across the U.S. challenging the WOTUS rule.

The decision came in the form of three separate opinions, as each judge had a different view of the law on this complex issue. Two judges concluded that the appellate court has jurisdiction over the legal challenges to the WOTUS rule; the third judge concluded that the appellate court lacks jurisdiction over these cases.

It is speculated that the split decision makes it very likely that the state and industry petitioners will seek en banc review of the ruling, meaning that it would go to rehearing before the entire Sixth Circuit for additional review. Challengers will need to petition the court within 45 days to request rehearing.

The decision, which does not answer the legality of the WOTUS rule, but rather which court has authority to review it, means that stay of the WOTUS rule issued last year by the Sixth Circuit will continue in effect until further rulings.

The decision could also be appealed, potentially to the U.S. Supreme Court.

Article By Aaron M. Phelps of Varnum LLP

© 2016 Varnum LLP

The ‘Commoditization’ of Water in The West

The ‘Commoditization’ of Water in The West

The treatment of water as a commodity, rather than a utility service, is gaining momentum in the western U.S. A recent Pro Publica/The Atlantic (February 9, 2016) article addresses the acquisition of water by hedge fund investors as commodity investments, instead of water service.

A New York City hedge fund manager, Disque Dean Jr., has identified numerous financially distressed agricultural properties with valuable water rights. Mr. Dean has acquired a number of these properties through his Water Asset Management fund, with an eye toward bringing a market based approach to water allocation.

Historically, access to water in the West has been allocated on the principle of “prior appropriation”-a concept of “first in time, first in right” to the water. While numerous limitations on the use (“beneficial use” is required to retain water rights) and its transfer, Mr. Dean asserts that allowing the purchase and sale of water on a market basis is one solution to the issue of the growing scarcity of water west of the Mississippi.

The experience of Crowley County, Colorado however, is offered as a cautionary tale on the treatment of water as a commodity. One of Colorado’s most fertile agricultural areas has dried up in the face of the sale of water to metropolitan water districts located far from the area where the water rights were originally held. Farmers and ranchers in the area seized the opportunity to cash out on their valuable water holdings, leaving much of the county’s former farm land high and dry. While other western states have dealt with the water as commodity issue more successfully (California’s Palo Verde Valley is offered as a success story) the creation of “water markets” and their ultimate impact in the West, is still up for grabs.

Article By Mark A. Davidson of Lewis Roca Rothgerber LLP

©2016 All Rights Reserved. Lewis Roca Rothgerber LLP

2016 TSCA Chemical Data Reporting – Are You Prepared?

The Toxic Substances Control Act (TSCA) Chemical Data Reporting (CDR) rule (40 C.F.R. Part 711) will require U.S. manufacturers and importers of certain chemical substances to report information on these substances to the U.S. Environmental Protection Agency (EPA) by September 30, 2016. Industry should be well aware of and theoretically has ample time to meet this deadline, but the 2016 CDR is more complicated, more onerous, and requires more information than the 2012 CDR. Particularly given the significant penalties for CDR noncompliance (up to $2-5,000 per chemical per site), companies should devote significant time and effort to ensuring full compliance with this requirement.

Companies should be preparing now for the CDR submission period in 2016.

  • CDR reports must be submitted between June 1 and September 30, 2016.

  • Companies must report if they manufactured in or imported into the U.S. at least 25,000 pounds (lbs.) of a TSCA Inventory listed substance at any one U.S. site during any one of the following calendar years – 2012, 2013, 2014, or 2015.

  • Certain regulated chemicals (e.g., chemicals subject to TSCA section 5 significant new use rules (SNUR)) are subject to a lower, 2,500 lbs./year, manufacture / import volume threshold for these calendar years. —

  • CDR reports must include detailed, chemical-specific and site-specific manufacture / import and processing / use information for calendar year 2015 (the “principal reporting year”), and production volume information for each calendar year from 2012 to 2015.

  • Information reported for the CDR can be claimed as TSCA confidential business information (CBI) only if “upfront” substantiation is provided.

EPA regulations governing CDR appear at 40 C.F.R. Part 711. For additional information, visit http://www.epa.gov/cdr.

The CDR Program

Since 1986, U.S. manufacturers and importers have been required to periodically submit under TSCA certain basic information on many of the now over 85,000 chemicals appearing on the TSCA Chemical Substance Inventory (Inventory). Information submitted to EPA under this reporting requirement has been used as a tool for regularly updating the Agency and the public as to potential human and environmental exposure to substances in U.S. commerce.

In 2011, EPA overhauled this reporting requirement, which was originally known as the TSCA Inventory Update Rule (IUR) rule. The new “CDR” rule ushered in significant changes to reporting requirements beginning with the first CDR submission period, which ended in August 2012. For the 2012 CDR, about 1,600 U.S. companies reported activities for about 7,700 chemicals at about 4,800 sites. The second CDR reporting period will occur between June 1 and September 30, 2016 (to recur at 4-year intervals thereafter). Given the broader time period beginning in 2016 during which chemical production can trigger CDR reporting, in the future even more companies will likely be subject to and have to report on more chemicals.

Basic Thresholds and Reporting Requirement

For the 2016 submission period, companies must report for the CDR if, at one or more U.S. sites, they manufactured in or imported into the U.S. at least 25,000 pounds (lbs.) of a reportable chemical substance during any one of the calendar years 2012, 2013, 2014, or 2015. The CDR reporting form is known as the “Form U.”

The Form U requires companies to provide a variety of information, including technical contact information, and a Chemical Abstracts (CA) Index Name and corresponding Chemical Abstracts Service (CAS) Registry Number (CASRN) (if available) for each reportable substance.

To the extent that it is known or reasonably ascertainable, the Form U requires reporting of the following information on manufacture / import activities for each reportable substance at each site:

  • Volume of the substance that is manufactured or imported;

  • Number of workers reasonably likely to be exposed to the substance at each site;

  • Physical form(s) of the substance as it leaves the submitter’s possession, along with the associated percent production volume; and

  • Maximum concentration of the substance as it leaves the submitter’s possession;

  • Volume of a substance used on site;

  • Volume of a substance that is directly exported and not domestically processed or used;

  • Whether an imported substance is physically at the reporting site; and

  • Whether a substance is being recycled, remanufactured, reprocessed, or reused.

For the 2016 submission period, companies must also report production volume, by substance and site, for each of the calendar years 2012, 2013, 2014, and 2015.

Processing and Use Information

As was the case under the 2012 CDR, companies are required under the 2016 CDR to report detailed “processing and use” information associated with downstream domestic customer facilities regardless of whether the facilities are controlled by the manufacturer or importer. For the 2012 submission period, information on processing and use activities was required only for substances manufactured or imported in quantities ≥ 100,000 lbs. in the principal reporting year. This higher threshold, however, has been eliminated such that, other than substances specifically exempted from this required as described and listed at section 711.6, this extensive processing and use information is now required for all CDR-reportable substances.

Required processing and use information includes the following:

  • Type of industrial processing or use operations at downstream sites;

  • Approximate number of sites and estimated number of industrial processing and use workers reasonably likely to be exposed to each substance for each combination of processing or use code and industrial function category;

  • Estimated percentages of the submitter’s production volume for each processing or use code and corresponding industrial function category;

  • Whether the products are intended for use by children; and

  • Maximum concentration of the reportable chemical substance in each commercial and consumer product category.

Processing and use information must be reported if it is “known to or reasonably ascertainable by” the manufacturer or importer. This is a considerably lower standard compared to the previous IUR requirement to report information that was “readily obtainable.”

Exemptions from CDR Reporting

Several categories of substances are exempt from CDR – certain polymers, microorganisms, and certain natural gas streams – so long as the specific substance is not subject to certain specified TSCA actions, such as proposed or final rules issued under section 4, 5(a)(2), 5(b)(4), or 6 of TSCA (e.g., test rules, significant new use rules), or to orders issued pursuant to section 5(e) or 5(f). Note that substances that are subject to an enforceable consent agreement (ECA) are similarly ineligible for these exemptions, even if the CDR reporter is not a signatory to the ECA. Also, otherwise polymeric substances resulting from hydrolysis, depolymerization, or chemical modification of polymers must be reported if the hydrolysis, depolymerization, or chemical modification occurs to such an extent that the resulting product is no longer totally polymeric in structure.

Exemptions also exist for substances that are produced or imported in small quantities for research and development, substances imported as part of an “article,” and substances manufactured or imported as an “impurity” or “non-isolated intermediate.” Other types of substances that are described at 40 C.F.R. § 720.30(h) are also excluded from CDR.

“Byproducts” are excluded from CDR if their only commercial purpose is to be burned as a fuel, disposed as a waste, or from which component chemical substances are extracted for a commercial purpose. Note, however, that any extracted component substances are potentially reportable for CDR.

Under section 711.6, certain petroleum process streams and other specifically listed “low interest” substances are exempt from the requirement to submit processing and use information. Manufacturers and importers of partially exempt substances, however, are still required to provide the traditional information required on the Form U if the general 25,000 / 2,500 lbs. production volume threshold is exceeded. EPA has established a process for revising these “partially exempt” substance lists.

Electronic Reporting

CDR reports must be submitted electronically using e-CDRweb, EPA’s free electronic reporting tool, to EPA’s Central Data Exchange (CDX).

CDR Violations, Penalties

EPA can assess substantial monetary penalties (up to $25,000 per chemical per site) for failure to comply with the CDR. Violations subject to penalties include seemingly minor CDR reporting violations such as late reporting, or reporting a slightly inaccurate manufacture or import volume. Companies would be well-advised to carefully review their production / import records and their prior CDR filing before preparing and submitting the 2016 report. If non-compliance occurs, companies may be able to rely on EPA’s “Audit Policy” (65 Fed. Reg. 19,618 (April 11, 2000)) to mitigate or eliminate penalties for past reporting errors or omissions, but companies should consult with legal counsel before examining past CDR compliance.

Confidentiality and Records Retention

To claim the chemical identity, site identity, or processing and use information as confidential business information (CBI), reporting companies must substantiate such CBI claims at the time of reporting. Submitters cannot claim information as CBI when it is identified as “not known to or reasonably ascertainable.” CDR records must be kept for 5 years.

Small Business Exemption

Certain small manufacturers are exempt from the CDR. A company may qualify for a small business exemption from reporting if it either: (1) produces less than 100,000 lbs. of the otherwise reportable substance and has total annual sales of less than $40 million (including those sales of the parent company); or (2) has annual sales of less than $4 million regardless of production / import volume.

This exemption does not apply for any substance that is the subject of a proposed or existing rule issued under sections 4, 5(b)(4), or 6; an order in effect under section 5(e); or relief that has been granted under a civil action under sections 5 or 7.

CDR Non-Compliance Issues

In our experience, many factors contribute to CDR non-compliance. These can include:

  • inaccurate manufacture and import volume tracking

  • failure to report / file all or some reportable substances

  • incorrect conclusions as to who is the “importer” of a substance

  • failure to report production volume to the required two significant figures of accuracy

  • nomenclature issues

  • “toll” manufacturing issues

  • misinterpretation of exemptions

  • failure to account for reportable “byproduct” and related stream manufacture

  • fractionation issues

As noted above, CDR violations are potentially eligible for EPA’s “Audit Policy,” and companies should strive to preserve their ability to use the Audit Policy to the extent possible and seek legal advice when necessary.

Article By Thomas C. Berger of Keller and Heckman LLP

© 2015 Keller and Heckman LLP

BREAKING: EPA Water Rule Blocked Nationwide By Sixth Circuit

The Sixth Circuit today stayed the effect of the Environmental Protection Agency’s new “Clean Water Rule” nationwide, while the Court of Appeals considers whether it has original jurisdiction to hear challenges to the regulation or whether those challenges should proceed first in the federal district courts.  Among other reasons, the court said staying the Rule would remove uncertainty and confusion by restoring a uniform definition of “waters of the United States” nationwide.  Before today, the prior regulatory definition of waters of the United States was in effect in 13 states where the federal district court for North Dakota had enjoined the new Clean Water Rule; the new Rule’s definition applied in the rest of the country.

In granting the stay, the Sixth Circuit found that petitioners had a “substantial possibility” of succeeding on the merits of their challenge, for both substantive and procedural reasons.  Substantively, the court questioned whether the  Clean Water Rule’s provisions limiting jurisdiction over certain types of waters to those located within a specified distance from a navigable waterway are consistent with the Supreme Court’s decision in Rapanos v. United States, 547 U.S. 715 (2006).  Procedurally, the court found the rulemaking process by which the distance limitations were established was “facially suspect” because respondents have not shown those provisions were a “logical outgrowth” of the proposed regulations or that the public had “reasonably specific notice” the distance limitations were among the range of alternatives being considered.

As one member of the three-judge panel noted in dissent, the majority’s ruling is unusual in that the court enjoined implementation of the Clean Water Rule while it is still considering whether it even has jurisdiction to hear the challenges to the Rule.  In fact, petitioners have moved to dismiss their own petitions for lack of subject matter jurisdiction while also seeking a stay.  The majority’s statement that there is “no compelling showing that any of the petitioners will suffer immediate irreparable harm” in the absence of a stay is also in some tension with the Supreme Court’s decision in Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008), where the Court held (in the context of a NEPA challenge) that the party seeking a preliminary injunction must show a likelihood—not just a possibility—of irreparable harm absent an injunction.

The court said that briefing on the jurisdictional question will be complete, and the question ready for decision, “in a matter of weeks.”

Article By Robert J. Uram, S. Keith Garner & James Rusk
Sheppard, Mullin, Richter & Hampton LLP

Copyright © 2015, Sheppard Mullin Richter & Hampton LLP.

EPA Floats Proposed New Enforcement Initiatives for 2017 – 2019

On September 15, US EPA proposed its National Enforcement Initiatives (“NEI”) for calendar years 2017 through 2019. US EPA develops a set of NEI every three years, focusing federal resources on industries with noncompliance issues on a regional or national scale, where federal attention can make a difference. EPA’s latest proposal would add several new areas of concern to the list of NEIs. These include:

  1. Protecting Communities from Exposure to Toxic Air Emissions.

EPA is considering expanding the current air toxics initiative to include emissions from additional sources and industries, and has focused on two potential areas of concern:

  • Organic Liquid Storage Tanks: EPA notes that through advanced monitoring, including optical remote sensing techniques, EPA has observed that volatile organic compound (VOC) and hazardous air pollutant (HAP) emissions from storage tanks often greatly exceed the permitted or estimated levels. Sometimes, this is the result of inadequate maintenance of the tanks and associated emissions controls, design flaws, or the expansion of production volumes without corresponding increases in emissions control.

  • Hazardous Waste Air Emissions: Hazardous waste can result in toxic air emissions, and, if improperly handled, can also present a potential for increased fire or explosion risk due to their high corrosivity and ignitability. Such catastrophic events not only create a safety risk for workers and the surrounding community, they also create the potential for significant releases of toxic air pollutants. EPA believes that widespread violations of the air emission requirements under the Resource Conservation and Recovery Act (RCRA) are a significant contributing cause of these problems. Violations observed include the improper use of monitoring and control devices by facilities, resulting in releases of emissions from RCRA regulated units. Of particular concern are the toxic air emissions that result from the handling of hazardous waste at treatment, storage, and disposal facilities (TSDFs) and large quantity generators (LQGs) that are not properly controlling hazardous waste releases to the air as required by regulation.

  1. Keeping Industrial Pollutants Out of the Nation’s Waters.

EPA notes that certain industrial sectors contribute a disproportionate amount of water pollution over discharge limits.   EPA’s propsoed NEI would focus on the sectors with the most violations:

  • mining

  • chemical manufacturing

  • food processing

  • primary metals manufacturing

  1. Reducing the Risks and Impacts of Industrial Accidents and Releases.

According to EPA, approximately 150 “catastrophic” accidents occur per year among the universe of regulated facilities. These accidents pose a risk to neighboring communities and workers because they result in fatalities, injuries, significant property damage, evacuations, sheltering in place, or environmental damage. Approximately 2,000 facilities are currently considered “high-risk” because of their proximity to densely populated areas, the quantity and number of extremely hazardous substances they use, or their history of significant accidents. EPA believes that most of these accidents are preventable if the necessary precautions are taken. The potential NEI would focus on improved training of personnel, equipment maintenance, and inspections at those facilities and chemicals that pose the greatest risks.

The agency is seeking comment through October 14, 2015 on whether, along with the new priorities, it should keep or expand the current NEIs:

  • air pollution from power plants and other largest sources

  • toxic air pollution

  • pollution from land-based natural gas extraction

  • pollution from mineral processing operations

  • raw sewage and contaminated stormwater

  • animal waste pollution in water

Article By Katerina E. Milenkovski of Steptoe & Johnson PLLC

© Steptoe & Johnson PLLC. All Rights Reserved.

Re: Gold King Mine – Statement, Photos and Audio from EPA Administrator in Durango, CO

Today, EPA Administrator Gina McCarthy visited Durango, CO to inspect response efforts relating to the release of waste water from Gold King mine, and meet with state, local and tribal officials and community members. Tomorrow, Administrator McCarthy will visit the response efforts in Farmington, NM. More details about the visit will be released as they become available.

EPA

While in Durango, Administrator McCarthy attended a briefing at the Unified EPA Area Command where she discussed promising new data from August 7th, 8th, and 9th that is showing water quality levels in the Animas River near Durango similar to pre-event conditions. EPA is continuing to work with local community officials tasked with making decisions about public health. Later this afternoon EPA scientists will be meeting with those officials to discuss the new data and any decisions moving forward.

Photos: Photos from EPA Administrator Gina McCarthy’s trip to Durango, CO to inspect response efforts relating to the release of waste water from Gold King mine, and meet with state, local and tribal officials and community members.

Audio: Audio from EPA Administrator Gina McCarthy’s remarks and press conference at the Unified EPA Area Command in Durango, CO, on response efforts relating to the release of waste water from Gold King Mine.

Following the briefing, the Administrator held a press briefing at the Unified EPA Area Command in Durango. The following remarks can be attributed to EPA Administrator Gina McCarthy:

No agency could be more upset about the incident happening, and more dedicated in doing our job to get this right. We couldn’t be more sorry. Our mission is to protect human health and the environment. We will hold ourselves to a higher standard than anyone else.

I want to assure the general public as well as the leaders in the states, the counties and the tribal leaders, that we are working hand in hand with our partners to expedite this review, to expedite some return to normalcy in terms of using this river.

The river is returning to pre-event conditions. This is very good news, but we will be working with our partners so they have a chance to review this data thoroughly and have a chance to talk through this data in terms of what it means to their decisions moving forward. We are going to let this high quality and reliable science be our guide.

From this point on, the data will continue to come out. And that’s what’s going to influence decisions on what should happen in this river and in the affected counties.

For additional information on the response to the Gold King Mine release www.epa.gov/goldkingmine

This article first appeared in the EPA Newsroom.

ARTICLE BY EPA of U.S. Environmental Protection Agency
© Copyright 2015 United States Environmental Protection Agency

Draft EPA Study Finds Fracking Has Not Led to Widespread Drinking Water Contamination

The EPA released a draft of its study, U.S. EPA Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources (External Review Draft), EPA, Washington, DC, EPA/600/R-15/047, 2015, assessing the impact of hydraulic fracturing (fracking) on drinking water in early June (the draft Assessment). According to the EPA’s press release, the study finds that “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources,” but “identifies important vulnerabilities.” Fracking opponents, however, argue that the study vindicates their position.

The draft Assessment evaluated the potential impact of fracking at each stage of the Hydraulic Fracturing Water Cycle: water acquisition, chemical mixing, well injection, flowback, and wastewater treatment and waste disposal. The study’s objective was to “assess the potential impacts of hydraulic fracturing on drinking water resources, if any, and to identify the driving factors that may affect the severity and frequency of such impacts.” The draft Assessment “provides a review and synthesis of available scientific literature and data to assess the potential for hydraulic fracturing for oil and gas to impact the quality or quantity of drinking water resources, and identifies factors affecting the frequency or severity of any potential impacts.”

According to Dr. Thomas A. Burke, EPA’s Science Advisor and Deputy Assistant Administrator of EPA’s Office of Research and Development, the draft Assessment “is the most complete compilation of scientific data to date, including over 950 sources of information, published papers, numerous technical reports, information from stakeholders and peer-reviewed EPA scientific reports.”

[H]ydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources . . .

Supporters of fracking, such as American Petroleum Institute Upstream Group Director Erik Milito,say that the evidence gathered by EPA confirms that “[h]ydraulic fracturing is being done safely under the strong environmental stewardship of state regulators and industry best practices.” Meanwhile, opponents note that the EPA’s review found specific instances where well integrity and wastewater management related to hydraulic fracturing activities impacted drinking water resources. “The EPA’s water quality study confirms what millions of Americans already know – that dirty oil and gas fracking contaminates drinking water,” said Sierra Club Executive Director Michael Brune.

Numerous peer-reviewed EPA scientific reports were also released on the same day as the draft Assessment. Those reports were a part of EPA’s overall hydraulic fracturing drinking water study and contributed to the findings outlined in the draft assessment. More than 20 peer-reviewed articles or reports were published as part of this EPA’s draft Assessment.

The draft Assessment will be finalized after review by the Science Advisory Board (SAB) and public review and comment. The Federal Register Notice with information on the SAB review and how to comment on the draft assessment can be found here.

ARTICLE BY Edward Casmere of Schiff Hardin LLP

© 2015 Schiff Hardin LLP

New York Lawmakers Agree on Brownfield Law Extension With Less Drastic Changes to Tax Credits

Greenberg Traurig

In a departure from his budget proposal, the Legislature negotiated changes with the Governor to extend the tax credits for New York’s Brownfield Cleanup Program (BCP) with relatively modest changes to BCP eligibility requirements.  The Governor’s budget proposal would have limited the lucrative “tangible property” tax credit, which is the credit based on a percentage of the cost of constructing a new development on a Brownfield site, to (i) properties located in an environmental zone, (ii) properties to be utilized for affordable housing, or (iii) “upside down” properties – where the remediation of the property is projected to cost more than the value of the remediated property.  Under the bill agreed to with the Legislature, however, those limits (with modifications) will apply only to properties located in New York City.  In other words, outside of New York City, eligibility for the tangible property tax credit will remain available to all developers that otherwise qualify under the BCP, as per existing law.

The news for New York City-based developments is also not all bad. The final bill adds a fourth category of properties eligible for the tangible property tax credit for “underutilized” properties – to be defined by regulation, and the criteria for upside down properties were loosened so that a property can qualify if the remediation is projected to cost over 75 percent – rather than 100 percent – of the value of the remediated property. Despite these revisions, the New York BCP will continue to provide significant tax incentives to developers seeking to clean up and redevelop contaminated sites and the extension will resolve the uncertainty over the future of the program that existed for several years.

Other changes include:

  • “Grandfathering” of Existing Tax Credits: Amendments to the law as they relate to all eligible tax credits are tied to the dates by which a Brownfield site is accepted into the BCP and obtains a Certificate of Completion (COC) from the Department of Environmental Conservation (DEC).

    • Existing provisions related to the tax credits would remain applicable to those sites that either (i) were admitted into BCP prior to June 23, 2008 and obtained their COC by December 31, 2017, or (ii) were admitted into the BCP between June 23, 2008 and July 1, 2015 (or the date by which DEC proposes regulations defining “underutilized,” whichever is later) and obtained a COC by December 31, 2019.

    • Amendments related to the tax credits are applicable to those sites that are accepted into the BCP between July 1, 2015 (or the date by which DEC proposes regulations defining “underutilized,” whichever is later) and December 31, 2022, so long as they obtain a COC on or before March 31, 2026.

  • Definition of “Brownfield Site”: The amendments redefine “Brownfield Site” to mean “any real property where a contaminant is present at levels exceeding the soil cleanup objectives or other health-based or environmental standards, criteria or guidance adopted by [DEC] that are applicable based on the reasonably anticipated use of the property.” This is a welcome change which ties eligibility to cleanup objectives and moves away from the prior vague definition that required the presence of contamination that “complicates” redevelopment.

  • Creation of a New EZ Program: The amendments empower DEC to adopt regulations to implement a program for “the expedited investigation and/or remediation” of brownfield sites (BCP-EZ program) provided the developer agrees to take no tax credits associated with the program. The EZ Program, however, appears to provide a minimal departure from existing remediation and public notice requirements, and thus may not actually provide for an expedited investigation as advertised. One area where a more expedited process may work is for Track 4 – restricted use – cleanups where the applicant the applicant would be allowed to use site-specific data to demonstrate that the concentration of the contaminant in the soils reflects background conditions and, in that case, a contaminant-specific action objective for such contaminant equal to such background concentration may be established.

  • Inclusion of Class 2 Sites: The amendments allow in class 2 Superfund sites that are being remediated by non-culpable volunteers.  Previously, such sites were deemed ineligible even if the party seeking to remediate the site had no role in the contamination.

  • Change In DEC Oversight Costs: The amendments eliminates the payment of DEC oversight costs for volunteers, and permits a flat fee charge to participants.

  • Related Service Fee: The amendments address a perceived problem related to the computation of service fees charged to the Brownfield applicant by a related party and the calculation of tax credits. The concern was that these service fees could be inflated as a way to increase the remediation or site preparation costs, and result in associated increases in the ceiling of eligible tangible property credits.  The amendments provide that such service fees cannot be claimed as eligible site preparation or remediation costs until they are earned and actually paid, and the portion of the tax credits related to such fees cannot be claimed until the taxable year when the subject property is placed into service. This limits the use of such fees as a way to inflate costs that are used to calculate the ceiling for tangible property credits. That ceiling is deemed to be the lesser of $35 million for residential/commercial projects ($45 million for industrial projects) or three times the amount of eligible site preparation and onsite groundwater remediation costs.

  • Definition of Eligible Site Preparation Costs and Groundwater Remediation Costs: The definition of eligible “site preparation” and “onsite groundwater remediation” costs is critical because these costs are eligible for tax credits that range from 28 to 50 percent of such actual costs, and, as noted, those costs are often used as the basis for calculating the ceiling for a project’s tangible property tax credits. The amendments provide a more specific and detailed description of eligible costs, requiring such costs to be necessary to implement a site investigation or remediation, or to qualify for a COC.  Eligible costs include those related to excavation, demolition, engineering and environmental consulting costs, legal costs, transportation and disposal of contaminated soil, physical support of excavation, and dewatering.

  • Increased Tangible Property Tax Credit Percentage and Changed Definition: The amendments limits the tangible property credit to only costs for tangible property with a useful life of at least fifteen years. Certain projects, however, will be eligible for a higher percentage tangible property credit, which in a general sense is a tax credit calculated based on a percentage of the cost of constructing the building on the Brownfield site.  Under existing law, that percentage is either 10 or 12 percent.  Under the amendments, that percentage can be increased in five percent increments, and total as much as 24 percent of the development costs, with five percent bonuses for sites that are cleaned up to Track 1 standards (highest level of cleanup), located in En-zones or a Brownfield Opportunity Area (BOA), or developed for manufacturing or affordable housing.

ARTICLE BY

Steven C. Russo
Robert M. Rosenthal
Greenberg Traurig, LLP